Adobe Inc., the maker of popular image editing software Photoshop, has forecasted its fiscal 2025 revenue to be lower than Wall Street estimates. The company’s shares plummeted over 10% in pre-market trading on Thursday.
Adobe is investing heavily in artificial intelligence (AI) technology to stay competitive, but it appears that these investments are taking longer than expected to pay off. The company expects foreign exchange volatility and a shift towards subscription-based services to cut into its revenue by about $200 million.
Despite this, analysts remain optimistic about Adobe’s long-term prospects. DA Davidson analyst Gil Luria said the company is well-positioned to benefit from a return of enterprise spending, including from AI. Adobe’s image and video AI generation capabilities are gaining broad adoption, which should continue to grow as models improve.
The company has recently added software tools that let customers use AI to create images based on its stock library. In contrast, Adobe’s fourth-quarter revenue rose 11% to $5.61 billion, beating market expectations of $5.54 billion. The company also earned an adjusted profit of $4.81 per share, slightly above estimates.
Overall, Adobe’s disappointing revenue forecast is a sign that the company is still navigating the challenges of integrating AI technology into its software applications. However, analysts believe that with continued investment and innovation, Adobe can regain its footing in the competitive landscape.
Source: https://finance.yahoo.com/news/adobe-forecasts-annual-revenue-below-212535711.html